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Tuesday, August 14, 2012

Wind Energy Layoffs, PTC Action, & Presidential Politics

Aug 9: A release from the American Wind Energy Association (AWEA) indicates that layoffs are increasing in the U.S. wind industry manufacturing sector in the absence of a policy signal only Congress can provide: extension of the Production Tax Credit that has been the basis for rapid growth of U.S. jobs and manufacturing since 2005 [See WIMS 8/1/12]. On August 2, the Senate Finance Committee, Chaired by Max Baucus (D-MT), with Ranking Member Orrin Hatch (R-UT), approved the bipartisan Family and Business Tax Cut Certainty Act of 2012 by a vote of 19 to 5. The legislation includes many tax cuts for small businesses, working families, research and development and renewable energy, including the controversial Production Tax Credit (PTC) for wind energy projects. Congress is now on break until after Labor Day.

AWEA reports that layoffs announced last week include: In Tulsa, OK, DMI Industries announced 167 workers will be unemployed by November; In West Fargo, ND, DMI Industries said 216 jobs stand at risk; In Little Rock, AR, LM Wind Power announced job reductions that will impact 94 full-time employees and 140 temporary workers and contractors; In Dallas, TX, Trinity Structural Towers said it will shift reposition resources away from wind turbine tower manufacturing.

AWEA indicates that the recent layoffs add to a longer list that have already happened this year. Those include: Wind turbine manufacturer Gamesa furloughed 165 of its Pennsylvania-based workers (July 5, Bloomberg); Wind measurement technology manufacturer NRG Systems laid off 18 Vermont-based employees in May, and an additional 12 in July the first time in 30 years the firm has had to make any layoffs (May 22, Windpower Monthly and July 18, Burlington Free Press); Wind turbine manufacturer Vestas laid off 182 employees (January 12, Huffington Post); Wind project developer Iberdrola Renewables laid off 50 U.S. employees, about half of whom were based in Oregon (January 25, North American Windpower); and Wind pattern analysis company Windlogics cut 10 of their Minnesota-based employees (July 2, Minnesota Public Radio)

AWEA CEO Denise Bode said the four companies, all major wind component manufacturers, laying off employees last week "represent what is happening and will continue to happen across the country in the U.S. wind industry if these businesses are not provided the policy certainty they need to continue to invest in America and its workers. I'm deeply distressed that our wind industry colleagues are facing furloughs and layoffs due to lack of stable tax policy. Unfortunately the industry has begun letting workers go up and down our American manufacturing supply chain, which the industry has so proudly built up in support of the U.S. economy and made-in-the-USA manufacturing. Congress must act now to give wind energy a stable business environment to keep building this new industry and save 37,000 American jobs by the first quarter of next year."

As WIMS has previously reported, an extension of the PTC enjoys widespread, bipartisan support from groups as diverse as the National Governors Association, the U.S. Chamber of Commerce, the National Association of Manufacturers, Edison Electric Institute, the American Farm Bureau Federation, environmentalists, labor unions, and others. Members of the House and Senate from both parties have indicated their agreement that the PTC should be renewed.

Despite the widespread support for the PTC extension, President Obama and Republican candidate Mitt Romney have sharply different views. President Obama and most Democrats support the extension; however, candidate Romney's campaign has indicated its desire to let the PTC expire at the end of the year [See WIMS 8/1/12]. The Romney campaign website indicates, "The 'green' technologies are typically far too expensive to compete in the marketplace, and studies have shown that for every 'green' job created there are actually more jobs destroyed. Unsurprisingly, this costly government investment has failed to create an economic boom."

On August 13, House Energy and Commerce Committee Ranking Member Henry Waxman released a Memo on Paul Ryan's Budget Cuts to Clean Energy, detailing cuts to key energy programs in the House Republican budget, which he authored and now the nominee for vice president on the Republican presidential ticket. The Ryan budget, which passed the House earlier this year with no Democratic support, would cut billions of dollars in funding for development of clean energy and eliminate programs that have helped support over 60,000 jobs. Rep. Waxman said, "The Ryan budget would reverse progress we have made to advance clean energy technologies. By cutting clean energy initiatives and jobs, while continuing to give billions of dollars in subsidies to oil and gas companies, the Ryan proposal would undermine American innovation and surrender the clean energy market to China. That is not what the American people need."

The Waxman memo highlights five areas in which the Ryan budget would have a significant impact on clean energy programs: (1) it reduces support for energy efficiency and renewable energy initiatives; (2) it halts the Advanced Technology Vehicle Manufacturing (ATVM) Loan Program; (3) it removes funding for loan guarantees for energy efficiency and renewable energy projects; (4) it eliminates support for green transmission projects; and (5) it maintains nearly $40 billion in tax breaks for oil and gas companies.

The Romney for President website, under its energy plan, indicates, "To begin with, wind and solar power, two of the most ballyhooed forms of alternative fuel, remain sharply uncompetitive on their own with conventional resources such as oil and natural gas in most applications. Indeed, at current prices, these technologies make little sense for the consuming public but great sense only for the companies reaping profits from taxpayer subsidies. . . As for job creation, studies show that "green" jobs might actually hurt employment more than they help it. Green energy is capital-intensive and tends to displace labor. Indeed, the track record in Europe shows that new "green" jobs came at a steep cost. . . The price tag in subsidies was exorbitant, rising to nearly $1.5 million per job in the wind industry. . . The failure of windmills and solar plants to become economically viable or make a significant contribution to our energy supply is a prime example."

Yesterday (August 13), at a campaign stop in Boone, Iowa, President Obama said, "My opponent and I disagree when it comes to homegrown energy like wind. Wind power is creating new jobs all across Iowa. But Governor Romney says he wants to end the tax credit for wind energy producers. Now, America generates more than twice as much electricity from wind than when I took office. That's right. The wind industry supports about 7,000 jobs right here in Iowa. Without these wind energy tax credits, those jobs are at risk -- 37,000 jobs across the country would be at risk. So my attitude is let's stop giving taxpayer subsidies to oil companies that don't need them, and let's invest in clean energy that will put people back to work right here in Iowa. That's a choice in this election."

Today (August 14) the Department of Energy (DOE) released a 93-page report -- 2011 Wind Technologies Market Report -- highlighting strong growth in the U.S. wind energy market in 2011, increasing the United States' share of clean energy and supporting tens of thousands of jobs, and underscoring the importance of continued policy support and clean energy tax credits to ensure that the manufacturing and jobs associated with this booming global industry remain in America. According to the report, the United States remained one of the world's largest and fastest growing wind markets in 2011, with wind power representing a remarkable 32% of all new electric capacity additions in the United States last year and accounting for $14 billion in new investment. According the report, the percentage of wind equipment made in America also increased dramatically. Nearly seventy percent of the equipment installed at U.S. wind farms last year -- including wind turbines and components like towers, blades, gears, and generators -- is now from domestic manufacturers, doubling from 35% in 2005.

The report finds that in 2011, roughly 6,800 megawatts (MW) of new wind power capacity was added to the U.S. grid, a 31% increase from 2010 installations. The United States' wind power capacity reached 47,000 MW by the end of 2011 and has since grown to 50,000 MW, enough electricity to power 13 million homes annually or as many as in Nevada, Colorado, Wisconsin, Virginia, Alabama, and Connecticut combined. The country's cumulative installed wind energy capacity grew 16% from 2010, and has increased more than 18-fold since 2000. The report also finds that six states now meet more than 10% of their total electricity needs with wind power.

Access a release with further details and links to related information from AWEA (click here). Access a release and link to the Memo from Rep. Waxman (click here). Access the Romney Energy Policy (click here). Access the President's Boone, IA speech (click here). Access a release from DOE and link to the wind energy market report (click here). Access an interactive map of U.S. wind manufacturing facilities(click here). [#Energy/Wind]

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